Labour Minister Santosh Lad tells banks to be considerate during loan recovery in Karnataka

Labour Minister and Dharwad district-in-charge Santosh Lad has asked banks to be considerate during loan recovery from farmers and take into consideration genuine reasons for delay in repayment.

Chairing a review meeting in Dharwad on July 14, the Minister said that farmers, skilled workers, and employees  become defaulters because of unavoidable reasons, and they should be given time for repayment. “Time for repayment should be granted. People’s lives are more important than loan recovery,” he said.

The Minister said that none should act inhumanly during loan recovery. He said a committee comprising of officials from the University of Agricultural Sciences, Revenue and Agriculture Departments, bank officials  and experts would be formed to study the causes and circumstances leading to farmer suicides. The study would be carried out scientifically with the help of agricultural experts, he said.

Mr. Lad emphasised the need for proper sensitisation among farmers regarding loan repayment, and banks should consider the financial condition of borrowers and give them flexible repayment options in genuine cases.

He categorically stated that no bank has the legal authority to adjust any kind of government relief, pension, crop compensation, insurance claim or subsidies against existing loans in NPA accounts. “Even if any such amount is deposited in the loan account due to technical reasons, it must be immediately redirected to the beneficiary’s savings account. I will also raise this with the Chief Minister,” he said.

Deputy Commissioner Divya Prabhu G.R.J. said that all banks had been warned against adjusting any government aid or compensation towards farm loans. “A formal proposal in this regard had already been submitted to the State Bankers’ Committee and the government by the district administration,” she said.

She mentioned that, sometimes due to technical reasons, government funds might get credited to loan accounts, but the banks were now returning the funds to beneficiaries’ savings accounts.  The Deputy Commissioner said that as the issue was prevalent across the country, it required rectification at the government level.